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Friday, Mar 29, 2024

Valley Hospitals to Gain from Influx of Paying Patients

Health care providers in the Valley region will have more resources to take care of people, thanks to the Supreme Court decision affirming major elements of the Affordable Care Act. But they also face huge implementation challenges, especially those that have put off changes that would allow them to deliver more cost-effective care. The ruling will cut in half hospitals’ uncompensated care burden, which in the valley amounts to about $370 million, according to the Hospital Association of Southern California. The expansion of Medi-Cal, higher Medi-Cal reimbursement rates and more insured patients should eliminate at least half that burden, said Jim Lott, executive vice president of the association. The bad news is that many health care providers still operate inefficiently and will face daunting challenges as the environment shifts from today’s fee-for-service pay model toward bundled pay or capitation. There also remains a significant shortage of primary care physicians, which will make achieving the goals of health care reform tough. Without adequate primary care doctors, the newly insured will wind up right back in the emergency room, warned Dr. Adam Singer, CEO of North Hollywood-based IPC The Hospitalist Company Inc., which provides hospitalist services nationwide. Based on its population, the San Fernando Valley has a total of 80 to 85 fewer family practice doctors than it needs; 33 to 38 fewer internal medicine doctors than it needs and 40 to 45 fewer pediatricians than it needs, according to the Centers for Medicare & Medicaid Services (CMS). The shortage in the Antelope Valley is said to be far worse. Most area providers, however, greeted the Supreme Court decision with a collective sigh of relief. Hospitals, managed care providers and clinics around the Valley have been implementing key elements of the Act since 2010. To have gone back would have meant a return to “the dark ages,” said Glendale Adventist Medical Center CEO Kevin Roberts. Most providers will proceed with plans they have already made. Kaiser Permanente’s two Valley hospitals — Panorama City and Woodland Hills —began extensive reform implementation efforts in 2010, the hospitals said. “This work involves continuing to improve the quality and integration of care and ensuring that we have the resources in place — physicians, nurses and other staff, as well as the right health care facilities — to provide the care our members will need,” a spokesperson said. The goal for Kaiser and others such as Providence Health & Services is delivering high quality care at affordable prices. “The reality for us is that regardless of this decision or the political process that will follow, we have made the decision to reduce the cost of care and partner with physicians to coordinate care,” said Michael Hunn, chief executive officer of Providence Health & Services California Region, which operates three hospitals in the Valley region. Providence announced it is joining forces with the Facey Medical Foundation and its 170 doctors effective July 1. The move follows other efforts by Providence to create an integrated delivery system by acquiring physician practices in the South Bay and Valley region. Doctors can join the system through its foundation, becoming employees, or have a looser affiliation through Providence Partners for Health. Glendale Adventist formed a similar foundation model to buy physician practices just last month. “This is the nucleus of our physician engagement approach, so we can begin to effect population health rather than incremental or episodic care,” Roberts said. For area clinics, which take care of thousands of working poor Valley residents who often lack insurance, the Supreme Court decision means they can continue with efforts to expand services. For Valley Community Clinic in North Hollywood, the decision means it can complete the construction of a new, full-service, 15,000-square-foot campus at James Monroe High School in North Hills. Funds for the project hinged on an expansion of the Medi-Cal program. The clinic expects to be able to double the number of patients who use its services to 40,000 by 2014, said CEO Paula Wilson. Northeast Valley Health Corp., which has 13 clinics in the San Fernando and Santa Clarita valleys and treats 70,000 patients a year, also will be able to proceed with plans for a 10,000-square-foot wellness center in San Fernando, which will be funded with a $5 million building capacity grant available through the ACA, said CEO Kimberly Wyard. She said she expects the clinic to be able to take on — and be compensated for — 2,000 new Medi-Cal recipients and 4,000 newly-insured patients through the state-run insurance exchange, which will be operating by 2014. Northridge-based Heritage Provider Network, a physician group that works only under the managed care model and delivers care to nearly 500,000 people in Southern California, stands to be a significant winner. The company was chosen by the Center for Medicare and Medicaid Services to be one of the early pioneers of accountable care organizations. Now, large hospital systems who are trying to learn how to deliver care to a large population at a greatly reduced cost are approaching the company seeking partnerships, said Dr. Richard Merkin, CEO and president. “We have gotten requests from several large medical groups, fee-for-service medical groups and academic medical center who want to build out their physician networks,” he said. “They are asking us to educate their physicians on how to coordinate care, work in teams and keep a population healthy.” The Supreme Court decision also will help North Hollywood-based IPC-The Hospitalist Company Inc. The company expects its income to rise 9 percent to 11 percent starting in 2013, said CEO Dr. Adam Singer. About 5 percent of that increase will come from higher Medicaid reimbursements (Under the new law, the federal program will reimburse physicians at a higher level); IPC also will get another 4 percent to 6 percent revenue boost from having more insured patients, either covered under the federal Medicaid program or a subsidized insurance plan. “We have already been caring for those people but not getting reimbursed,” said Dr. Singer. “So for my company, this is a net positive and I’m excited that more patients will have insurance, which is great for hospitals too.”

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